New Revenue Estimates Reduce 'Hole' in Proposed Nevada Budget

An estimate of $48 million in cuts needed in the nearly $7 billion Nevada budget now being finalized by lawmakers dropped to about $30 million on Tuesday as a result of yet another batch of updated revenue projections.

"It's down to $30 million and that's good," state Budget Director Andrew Clinger said in commenting on the latest projections provided by the lawmakers' analysts. "It's not as bad as it once was."

The $30 million is in addition to earlier cuts of $112 million outlined by Republican Gov. Jim Gibbons in his proposed budget.

Revenue projections made last week by the state Economic Forum had indicated additional cuts could be as high as $75 million. But that's now down to $30 million as a result of the follow-up analyses that have shown less state money must go to schools to offset shortfalls in local taxes.

The lower figure helps the state budget, but there's still uncertainty over a bill approved by lawmakers to erase big tax breaks for "green" construction projects. Gibbons is reviewing the bill and has said he may veto it. But if the tax breaks survive and are sought for more big projects, state funds going to the schools may have to increase. That would make the state's revenue shortfall climb.

Assembly Ways and Means Chairman Morse Arberry, D-Las Vegas,
said Monday that the uncertainty makes it "very difficult" to conclude work on the budget - a job that must be done by the end of the month in order for legislators to adjourn by June 4.

Arberry said another complication is the governor's continuing opposition to higher taxes or fees, unless those paying the fees volunteer to pay.

Clinger said the governor's position on fees and taxes remains unchanged, and under the current revenue projections there's enough
money to produce a balanced budget.

But the governor's spending plan doesn't include proposals such as the expanded full-day kindergarten plan being pushed by Assembly Speaker Barbara Buckley, D-Las Vegas - although lawmakers could
turn up more money by leaving in place some existing taxes that
Gibbons wanted to erase.

Buckley and other Democratic Assembly leaders already have said that given the declining revenues it seems unlikely that any tax breaks will be passed this session. That would include Gibbons' plan for a tax break for banks.

Gibbons has proposed reducing the tax rate on general business from 0.65 percent to 0.62 percent, which would cut state revenue by $28 million. He also has recommended scrapping the excise tax on bank branches, saving the industry another $6 million.

(Copyright 2007 by The Associated Press. All Rights Reserved.)